26 Aug VA Loan Refinance: Which One’s Right for You?
Benefits of Refinancing with VA home loans
When we talk about taking loans, we all know that there are so many organizations that provide loans. When we talk about veterans, the VA is organization that helps veterans to get the loan. For veterans there are so many plans provided by various organizations. One of them is refinancing for the home loans. We all are very well aware of the VA loans which provide the loan to the veterans and gives good benefits to them. If a veteran is thinking to refinance a home loan, it’s very easy in the VA loans. If a veteran who is going to apply for refinance and if his income as become less or value of home has been decreased or credit score has become worst, then also it’s very easy in VA loans. The homeowners who are looking for refinance, VA loans have become a lifesaver. The benefit which a veteran gets is very good as they can refinance up to the 100% value of their house and there is no need to pay for the mortgage insurance either. But if he is refinancing from some other non-VA loan company, they will require some equity in that house. If the market value of the house becomes stable veteran can ask for reducing the interest rates.
There is a plan called interest rate reducing refinance loan (IRRRL). It can be used by a homeowner to reduce his monthly EMI or to reduce the loan duration. In this program a homeowner has to do minimum documentation.
Refinancing by VA loan can be done only when you complete the process of occupation certification. A veteran can refinance by VA home loans for second house when it was occupied by him only at the time he took the first VA loan.
There are two options for refinancing by VA home loans:-
VA streamline refinance:-
This is also called as interest rate reduction loan (IRRRL). For existing loan holders it is the best option. It gives them an option to reduce their interest rates and to reduce their EMI. In this a veteran can reduce the VA mortgage cost too. There is not much documentation required in this type of refinance home loan option.
Cash out refinance:-
This option is very useful and helpful for those who has taken VA or conventional loans. In this there is an option in which equity of house of a borrower can be tapped by him and then he can use it as cash. The cash which a borrower gets through his equity can be used in improvements, emergencies or anywhere he desires. Those who are qualified veteran homeowners, only they can use this refinance option.
If you are willing to take a refinance loan then you should have existing VA home loans. Refinancing for home loans is very easy as a veteran’s loan is already verified and approved by VA. However, one needs to pay due attention to the details of refinancing and make sure that they go through all the terms and conditions beforehand.